Declarations and Exclusions

The California Supreme Court's Dating Do's and Don'ts

"What Are They Thinking?"  -- [First in] A Continuing Series

Recently, our California Supreme Court has taken to issuing decisions that, at least as they are reported to the larger world, seem to require . . . explanation?  Clarification?  A double-take at least?  These have included cases holding roller coasters to the same safety standards as trains and crosstown buses, cases that at first glance appear out of step with the U.S. Supreme Court on punitive damages, and so on.  With this post, this weblog begins a recurring series -- "What Are They Thinking?" -- in which these seeming anomalies will be poked and prodded to see if they really are as perplexing as first impressions suggest.

Under consideration today: the Court's July 18 opinion in Miller v. Department of Corrections, revisiting the law governing employers' liability for sexual harassment in the workplace. 

For those just tuning in, a few broad generalities:  Sexual harassment is viewed in the law as a form of gender-based discrimination, and employers who commit or support harassment may be liable for substantial damages to those against whom the discriminatory conduct has operated.  Sexual harassment generally comes in two major varieties: "quid pro quo," the most obvious form, in which advancement or benefits at work are conditioned upon the employee succumbing to the employer's demands for sexual favors, and the more subtle "hostile environment," in which the employee is subjected to an overall atmosphere that is "hostile or abusive on the basis of sex" and so offensive to a person of ordinary sensibilities that it interferes substantially with the conditions of the employment.

Turning to the case at hand, here are the headline and the opening paragraphs of the Los Angeles Times' report on the state Supreme Court's latest foray into the field:

Affairs at Work Subject to Suits
Expanding the law against sex harassment, the state high court says all workers may suffer if a relationship causes the boss to show favoritism.

SAN FRANCISCO — Workers who lose promotions to colleagues who are sleeping with the boss can sue their employers for sexual harassment, the California Supreme Court ruled Monday.

In a significant expansion of sexual harassment law in California, the state high court unanimously decided that any worker, male or female, could suffer sexual harassment even if his or her boss never asked for sexual favors or made inappropriate advances.

Previously, only the worker who had the affair or received unwanted sexual attention could prevail in California.

"My, my," you may be saying, "that sounds like a real change in the law.  You mean I can sue my boss because he is having a purely voluntary affair with someone else?"  Yes, you can, says a unanimous California Supreme Court, while emphasizing that the reasons for its decision depend heavily on the salacious facts of the case before it (which the Times decorously places well down in its article).

In this case prison warden Lewis Kuykendall was, in essence, maintaining his own personal harem, carrying on consensual sexual relationships with at least three female members of the prison staff: his secretary Kathy Bibb, associate warden Debbie Patrick, and another Corrections Department employee with the wonderfully apt name Cagie Brown.  The plaintiffs were two other female employees, neither of whom was ever involved with or approached in any directly improper way by Kuykendall.  Their complaints of sexual harassment depended on what they alleged was pervasive favoritism by Kuykendall toward his sexual partners and those partners' misuse of their own perceived position of influence with Kuykendall.  Among the many incidents on which plaintiffs relied:

• When a panel failed to promote Kathy Bibb to a counseling position, Kuykendall made it know that they should "make it happen."  Bibb got the promotion.
• An employee (not a party to the case) was terminated after she made Kuykendall's affair with Cagie Brown public. 
• Brown bragged to one of the plaintiffs concerning her ability to control Kuykendall, and to obtain extra benefits from him.  When competing with the plaintiff for a promotion, Brown bragged that she would get the job because otherwise she would "take [Kuykendall] down," taking advantage of her knowledge of "every scar on his body."
• The three women involved in the affairs publicly squabbled over Kuykendall in front of other employees.
• Kuykendall was seen fondling one or another of the three at employee social gatherings.
• Brown became involved in another relationship, with a female assistant warden, that was described as "more than platonic."  When one of the plaintiffs confronted Brown about her various relationships, Brown assaulted her and essentially held her prisoner in an office for several hours.

Two lower courts rejected the plaintiffs' claims, finding that plaintiffs themselves had never been the objects of improper overtures by Kuykendall and that they had not been treated any differently than male employees (i.e., they had not been discriminated against because they were women).  The Supreme Court reversed, concluding that

. . . although an isolated instance of favoritism on the part of a supervisor toward a female employee with whom the supervisor is conducting a consensual sexual affair ordinarily would not constitute sexual harassment, when such sexual favoritism in a workplace is sufficiently widespread it may create an actionable hostile work environment in which the demeaning message is conveyed to female employees that they are viewed by management as 'sexual playthings' or that the way required for women to get ahead in the workplace is by engaging in sexual conduct with their supervisors or the management.

(Emphasis added.)

The Court was at pains to emphasize that it was not holding that private, consensual relations between co-workers are actionable by nonparticipants in every case, or even in most cases.  What caused the Court concern here was not the existence of Kuykendall's complicated personal life, but the seemingly abundant evidence that the various relationships had a direct and negative impact on working conditions for other employees. 

Certainly, the presence of mere office gossip is insufficient to establish the existence of widespread sexual favoritism, but the evidence of such favoritism in the present case includes admissions by the participants concerning the nature of the relationships, boasting by the favored women, eyewitness accounts of incidents of public fondling, repeated promotion despite lack of qualifications, and Kuykendall’s admission he could not control Brown because of his sexual relationship with her ― a matter confirmed by the Department’s internal affairs report. . . .

Finally, defendants warn that plaintiffs’ position, if adopted, would inject the courts into relationships that are private and consensual and that occur within a major locus of individual social life for both men and women — the workplace.  According to defendants, social policy favors rather than disfavors such relationships, and the issue of  personal privacy should give courts pause before allowing claims such as those advanced by plaintiffs to proceed. Defendants urge it is safer to treat sexual favoritism as merely a matter of personal preference, and to recall that the [Fair Employment and Housing Act] is not intended to regulate sexual relationships in the workplace, nor to establish a civility code governing that venue.

We do not believe that defendants’ concerns about regulating personal relationships are well founded, because it is not the relationship, but its effect on the workplace, that is relevant under the applicable legal standard. . . .

The Court's logic, focusing as it does on a substantial compilation of evidence showing a pervasive unfairness toward women who were not involved in the affairs, is reasonably compelling: even if Kuykendall did not intend to discriminate against those other women, the practical effect in the workplace was the same. 

Note, by the way, that the Court is concerned in this case only with discrimination against women, presumably because both of the plaintiffs were female.  The Times report closes with a comment by the plaintiffs' counsel, suggesting employers had best look out for future litigation involving non-consensual non-participants of all stripes:

Barbara Lawless, who represented the alleged victims in the case, said the decision could permit male as well as female employees to sue when the boss is showing favoritism to sexual partners.

'If you have to sleep with the boss to get ahead, men have causes of action too,' Lawless said.

She said it was unfair in the past that only the people who had slept with the boss could sue for sexual harassment.

'It vindicates women who sit there and watch their sisters in the workplace have affairs,' Lawless said.

Sisterhood is powerful.  Also potentially litigious.

~~

 

The decision in Miller v. Department of Corrections (July 18, 2005), Case No. S114097, can be accessed at these links in PDF and Word formats.
[Note: Links expire approximately 120 days following issuance of the opinions; the opinions should still be accessible thereafter by substituting "archive" for "documents" in the URL.]

California Supreme Court: Employer is Strictly Liable for Harassment by Supervisor, but Employee Must Take Reasonable Steps for Own Protection

Addressing a claim under California's Fair Employment and Housing Act [FEHA], the California Supreme Court has held that an employer will be held strictly liable for the wrongful acts of a supervisor whose conduct gives rise to a claim of sexual harassment on a "hostile environment" theory. However, the Court has also concluded that the employee may not recover any damages that the employee "could have avoided with reasonable effort and without undue risk, expense, or humiliation", such as by reporting the incidents to the employer at the time they occurred.

Under the language of FEHA relating to sexual harassment, an employer is only liable for harassment by a non-supervisor when the employer has actual or constructive knowledge of the harassment and fails to take immediate steps to correct the situation. This is essentially a negligence standard. When the harassment is committed by a supervisor, however, the Court concludes that the language of FEHA imposes strict liability: that the acts were committed by a supervisor is sufficient to impose liability on the employer without regard to the employer's knoweldge or opportunity to take remedial measures.

However, the lack of notice to the employer may still operate to reduce the damages that the harassed employee can claim. The Court concludes that harassment claims against an employer under FEHA must be subject to the "avoidable consequences doctrine," and that the employee may not recover any damages that might have been avoided had the employee complained or taken other reasonable steps for the employee's own protection. The application of the doctrine is required largely as a matter of public policy:

The avoidable consequences doctrine is well established and broadly applied, and nothing in the FEHA’s language and structure indicates that the Legislature intended to abrogate this fundamental legal principle. On the contrary, failure to apply the avoidable consequences doctrine to FEHA sexual harassment claims could undermine a basic goal of the FEHA—to make employers the first line of defense against sexual harassment in the workplace. A rule making employers liable even for those damages that an employee could have avoided with reasonable effort and without undue risk, expense, or humiliation would significantly weaken the incentive for employers to establish effective workplace remedies against sexual harassment.

The Court's opinion in State Department of Health Services v. Superior Court (McGinnis) (Nov. 24, 2003), Case No. S103487, is available at these links in PDF and Word formats.

Headaches for California Employers: No Good Deed Goes Unpunished While Waiting for the Bounty Hunters

There has been a shortage recently of new California appellate decisions in the fields on which we most focus on this site, but that doesn't mean there is nothing new under the California legal sun. For employers here is an interesting confluence of recent case law and recent legislation:

Megan McArdle, aka Jane Galt, on her Asymmetrical Information site links to a report at Mike O'Sullivan's Corp Law Blog on the recent Court of Appeal decision in the case of Ralphs Grocery Co. v. Superior Court. The Ralphs markets -- currently one of the targets of the southern California grocery strike -- implemented a bonus plan for its employees, based upon the profitability of its stores determined by GAAP accounting methods. In making the GAAP computations prior to determining the amount of any bonus, Ralphs would take into account expenses such as shoplifting losses and workers' compensation costs. Even though those reductions were made in the initial GAAP calculation -- i.e., before the amount of any bonus was calculated -- the Court viewed the calculations as constituting prohibited "deductions from wages for 'any cash shortage, breakage, or loss of equipment, unless it can be shown that the shortage, breakage, or loss is caused by a dishonest or willful act, or by the gross negligence of the employee.'" On that basis, the court disallowed the bonus program for non-exempt employees. Mike O'Sullivan summarizes the result:

Here, a regulatory imperative to protect lower-level workers from certain charges will deprive them of many unrelated but significant benefits. California's voluminous wage and hour laws are notoriously Byzantine, uneconomic, illogical and nit-picky. California's plaintiffs' bar is notoriously quick to bring class action lawsuits against employers who deviate in any way from these laws. Many California employers, sizing up the situation, will conclude that the economically rational decision will be to exclude all lower-level employees from company-wide bonus plans.

(Emphasis added.) For employers, the potential headaches from this ruling are only compounded by the recent passage and signing of California Senate Bill 796. That statute, effective January 1, 2004, effectively authorizes "bounty hunting" by allowing individual employees to bring civil actions recover penalties under California's Labor Code whenever the state agencies charged with Labor Code enforcement do not do so. While any penalties assessed in such suits go to the State, the employees who bring the actions are authorized to recover attorneys' fees and, in some cases, additional penalties, and the statute creates a penalty for any Labor Code violation for which the Code itself doesn't already specify a penalty.